MMA Fighters Getting Owned - SBartlett's Blog

SBartlett's Blog

MMA Fighters Getting Owned

Posted on August 25, 2013 at 10:24 AM.

MMA Fighters Getting Owned

Sports Marketing and Legal Analysis with a mix of Sports Gaming � All views and opinions are of my own, and are not meant to be considered professional legal advice.

Author: Steven Bartlett

�The fighters need a voice somewhere. Our rights need to be represented, and our feelings need to be represented somehow.�

-Jon Fitch, Former UFC MMA Fighter, June 2013

Pro union sentiment has been some what rare when it comes to the UFC. Maybe the fighters do want a union, afterall. Many current fighters and trainers praise the UFC, giving credit where it�s due: without the UFC, these fighters wouldn�t have the platform they have now within the sport � that they are taken care of. Truth. Also true is without any bargaining power or union support, MMA promotions will continually use coercive tactics in negotiations against fighters who desperately want a shot in the Octagon.

A brief look into a UFC fighter contract can explain to fight fans and fighters alike just how many personal property rights a fighter gives up when signing, such as losing their exclusive ownership in their own tattoos.

Outside of the ring, fighters now may start to position themselves for a seat at the table in managing their intellectual property. Currently, UFC retains ownership of licenses to every fighter signed on with the promotion company. According to a Zuffa, LLC standard form contract obtained by BleacherReport.com, UFC owns the promotional rights and ancillary rights of the fighters in perpetuity, which survives the death of a fighter. An ordinary fighter�s likeness, merchandising rights, video highlight rights, digital rights, tattoos and more are found in the ancillary rights.

Similarly, Bellator MMA reportedly has an anciallary clause in which the promotion company owns licensing and patent rights to their fighters in perpetuity. Some fighters, such as Victor Meza, have been told the terms are �non-negotiatble.� In other words, the contract is a take-it or leave-it offer constructed to heavily favor Bellator MMA.

Below is an example of the actual contract language from a ZUFFA, LLC Standard Form Contract to gain an understanding of the nature of the contract language.

ZUFFA, LLC. Standard Form Contract Excerpt Re: Licensing:

ARTICLE I
GRANT OF PROMOTIONAL RIGHTS

1. The Fighter hereby grants to ZUFFA the exclusive unrestricted worldwide right to secure, promote, arrange and present any and all mixed martial arts contests (individually, a �Bout� and collectively, the �Bouts�) to be engaged in by Fighter during the Term (as defined herein) and any Extension Term (as defined herein), including all rights to stage each Bout and to sell tickets of admission thereto (the �Promotional Rights�) and to exploit the Ancillary Rights (as defined herein) to each Bout in all media, now known or hereafter devised throughout the world in perpetuity.

ARTICLE II
GRANT OF ANCILLARY RIGHTS

2. Fighter hereby grants to ZUFFA the exclusive worldwide right to use, display, disseminate, edit, reproduce, print, publish and make any other use of the name, sobriquet, image, likeness, voice, persona, signature, and biographical material of Fighter and all persons associated with Fighter(collectively, the �Identity�), in any medium in connection with advertising, marketing, exploiting and promoting the UFC brand and each Bout and the exploitation of all rights pertaining thereto as provided herein and all rights to each Bout electronic and other (the �Ancillary Rights� and, collectively with the Promotional Rights, the �Rights�).

All proceeds sold categorized under the ancillary agreement do not go to the fighters � the proceeds go to the UFC. When it comes to video games, revenue may be disseminated to said fighter at an arbitrary rate in the form of a bonus chosen by UFC and Zuffa, found in paragraph G of Article 2.3 in the standard contracts. This clause below is specifically regarding video games and the title with EA Sports.

According to UFC General Counsel�s Lawrence Epstein, the UFC does provide a merchandising contract where 10% of gross revenues pays out to the fighter in certain scenarios.

ARTICLE II
GRANT OF ANCILLARY RIGHTS

Section 2.3(g): Additionally, Fighter acknowledges the existence of UFC Video Games (as defined herein) developed, being developed, or to be developed by various companies, including, but not limited to, Electronic Arts Inc. Fighter further acknowledges that the Rights granted herein to ZUFFA shall be exclusive with respect to any UFC Video Game, and any derivatives of such video games created by ZUFFA or its licensees� ZUFFA acknowledges and agrees that Fighter shall be paid a bonus, as determined in the sole discretion of ZUFFA, for each console version of a UFC Video Game in which the Fighter appears�.ZUFFA agrees that if it does not utilize the Identity of Fighter in a UFC Video Game within three (3) years of Effective Date, that the Rights granted by Fighter to ZUFFA pursuant to this Section 2.3(g) shall become non-exclusive and Fighter shall have right to exploit his identity in video games that are not UFC Video Games.

UFC�s latest game with EA Sports leverages the license and showcases the world�s best MMA fighters to promote the upcoming release of the game in the spring of 2014. EA Sports has built marketing materials around the star power of Jon Jones, as seen in this screen shot above. Implementing tech dubbed MMAi, EA Sports has programmed the digital Jon Jones to fight with a strategy and the mind of the real-life Jon Jones, exploiting his biography, personality, and signature style.

If I�m Jon Jones or his representation, I want to control the likeness of him in this game as much as I can and make EA Sports work for Jon Jones in promoting his image and brand.

Instead, his personal brand is at the mercy of UFC and EA Sports. The game will feature Jones� signature attacks, fight style, and personality. This is true for all the fighters licensed in the game.

Based on Standard and Poor�s estimations, 45% of Zuffa, LLC�s revenue came outside of event-based revenue. In that 45%, the ancillary rights reside.

Reportedly 10% of the merchandising gross revenues go to fighters as a bonus through the separate merchandise rights contract. This contract most likely exists for the stars that are used in major promotional campaigns such as cover athletes on games and dvds, and other promotional materials, and could be reserved for fighters in participation of the game.It seemingly conflicts with the standard form contract above, so it�s unclear as to which contract is controlling in the event of a dispute over royalties � the 10%, or the arbitrarily chosen percentage. At the very least, fighters with separate contracts look to be guaranteed 10%; those without it, no bonus appears guaranteed.

It should be noted that the �Rights� clause above does stay �unrestricted use� which could be construed as binding, or final; any agreement outside of this standard form contract language may be deemed invalid in the courts.

On July 31st in Keller vs. EA, Sam Keller, former NCAA athlete, prevailed in the 9thCircuit Court of Appeals in California regarding his likeness and intellectual property in the EA Sports college football games. The Court of Appeals held that the artistic renderings of NCAA athletes are not afforded 1st Amendment free speech protection by the artists working at EA; the renderings are protected IP for each and every NCAA athlete, and this ruling should apply to each fighter in professional MMA except right now, it doesn�t.

Every fighter that signs with the UFC contract above (and presumably Bellator MMA) is contractually and consensually giving up the right to control their digital image for their lifetime, notwithstanding some basic use criteria. The same may be true for fighter contracts across the MMA industry. Maybe this will open the eyes up of these fighters and realize that actors such as Sam Keller and Ed O�Bannon are taking this fight to the courts to retain the rights to their digital brands and digital selves.

Is UFC taking advantage of their position as the dominant player in MMA, unilaterally enforcing fighters to give up IP rights to fight in the UFC? Is it worth it for the fighters so they may fight in the UFC on Fox and PPV Events? Should the fighters have a voice in these matters, regardless? What do you think?

UFC Standard Form Contract of Fighter Eddie Alvarez:http://bleacherreport.com/pages/eddie-alvarez-contract

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